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ECO 561 Week 2 Reflection Assignment 5-page paper Answer

ECO 561 Week 2 Reflection Assignment 5-page paper Answer

ECO 561 Week 2 Reflection Assignment 5-page paper Answer

ECO 561 Week 2 Reflection Assignment 5-page paper Answer

ECO 561 Week 2 Reflection Assignment 5-page paper Answer

ECO 561 Week 2 Reflection Assignment 5-page paper Answer


Week 2 Reflection

Discuss this week’s objectives with your team. Your discussion should include the topics you feel comfortable with, any topics you struggled with, and how the weekly topics relate to application in your field.

Prepare a 1- to 3-page paper detailing the findings of your discussion

Topics:

Identifying Optimal Production Levels

Explicit and Implicit Costs

Diminishing Returns

Industry Specific Analysis

Explain how to balance fixed and variable costs

Apply economic cost concepts in making business decisions

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ECO 561- 1

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Chapter 23 Problems 23-1, 23-2, 23-3, and 23-4 Chapter 24 Problems 24-1 and 24-2 Chapter 20 Mini Case on pages 824-825 Answer

Chapter 23 Problems 23-1, 23-2, 23-3, and 23-4 Chapter 24 Problems 24-1 and 24-2 Chapter 20 Mini Case on pages 824-825 Answer

Chapter 23 Problems 23-1, 23-2, 23-3, and 23-4 Chapter 24 Problems 24-1 and 24-2 Chapter 20 Mini Case on pages 824-825 Answer

Chapter 23 Problems 23-1, 23-2, 23-3, and 23-4 Chapter 24 Problems 24-1 and 24-2 Chapter 20 Mini Case on pages 824-825 Answer

Chapter 23 Problems 23-1, 23-2, 23-3, and 23-4 Chapter 24 Problems 24-1 and 24-2 Chapter 20 Mini Case on pages 824-825 Answer

Assignment #1 Chapter 23

P23-1) If Zhao issues fixed rate debt and then swaps, its net cash flows will be:

P23-2) The price of the hypothetical bond is . Using a financial calculator, we can solve for rd as follows:

N = 40; PV = ; PMT = 30; FV = 1000; solve for I/YR = The annual value of rd

P23-3) Futures contract settled at 100 16/32% of $100,000 contract value, so PV = Using a financial calculator, we can solve for rd as follows:

N = PV = ; PMT = ; FV = ; solve for I = rd =  2 =  5.96%.

If interest rates increase to the contract’s value has decreased from ….

P23-4) If Carter issues floating rate debt and then swaps, its net cash flows will be:

If Brence issues fixed rate debt and then swaps, its net cash flows will be:

Chapter 24

P24-1)
Distribution of proceeds on liquidation:
1. Proceeds from sale of assets $
2. First mortgage, paid from sale of assets 0
3. Fees and expenses of administration of bankruptcy
4. Wages due workers earned within 3 months
prior to filing of bankruptcy petition 0
5. Taxes 0
6. Unfunded pension liabilities 0
7. Available to general creditors

Distribution to general creditors:………………………………
……………………
……………………………………………………………………
……………………………………………….

P24-2)

a. The pro forma balance sheet follows (in millions of dollars):

Current assets Current liabilities
Net fixed assets Advance payments
Goodwill Reserves
Subordinated debentures
$2.40 preferred stock,
$37.50 par value
(1,200,000 shares)
Common stock,
par value
(6,000,000 shares)
Retained earnings
Total assets Total claims

…………………………………………………………………….
……………………………………..

b. The pro forma income statement (in millions of dollars) follows:

Net sales
Operating expense
Net operating income
Other income
EBIT
Interest expense
Pre-tax earnings
Taxes (50%)
Net income
Dividends on $2.40 preferred
Income available to common stockholders

………………………………………………………………………
……………………………………

c. The earnings required before the recapitalization is Thus, required earnings will decrease by ..
……………..if the reorganization takes place…………………….

d. The debt ratio before reorganization is ………………than preferred stock……………………………………………….

Assignment #2

Answer the questions in Chapter 20 Mini Case on pages 824-825 in the textbook

Chapter 20

Minicase

Paul Duncan, financial manager of Edusoft Inc., is facing a dilemma. The firm was founded five years ago to provide educational software for the rapidly expanding primary and secondary school markets. Although Edusoft has done well, the firm’s founder believes that an industry shakeout is imminent. To survive, Edusoft must grab market share now, and this will require a large infusion of new capital.
Because he expects earnings to continue rising sharply and looks for the stock price to follow suit, Mr. Duncan does not think it would be wise to issue new common stock at this time. On the other hand, interest rates are currently high by historical standards, and with the firm’s B rating, the interest payments on a new debt issue would be prohibitive. Thus, he has narrowed his choice of financing alternatives to: (1) preferred stock; (2) bonds with warrants; or (3) convertible bonds.
As Duncan’s assistant, you have been asked to help in the decision process by answering the following questions:

a) How does preferred stock differ from both common equity and debt? Is preferred stock more risky than common stock? What is floating rate preferred stock?

b. What is a call option? How can knowledge of call options help a financial manager to better understand warrants and convertibles?

c. Mr. Duncan has decided to eliminate preferred stock as one of the alternatives and focus on the others. EduSoft’s investment banker estimates that EduSoft could issue a bond-with-warrants package consisting of a 20-year bond and 27 warrants. Each warrant would have a strike price of $25 and 10 years until expiration. It is estimated that each warrant, when detached and traded separately, would have a value of $5. The coupon on a similar bond but without warrants would be 10%.

1. What coupon rate should be set on the bond with warrants if the total package is to sell for $1,000?
c. 2. When would you expect the warrants to be exercised? What is a stepped-up-exercise price?
c. 3. Will the warrants bring in additional capital when exercised? If EduSoft issues 100,000 bond-with-warrant packages, how much cash will EduSoft receive when the warrants are exercised? How many shares of stock will be outstanding after the warrants are exercised? (EduSoft currently has 20 million shares outstanding).

c. 4. Because the presence of warrants causes a lower coupon rate on the accompanying debt issue, shouldn’t all debt be issued with warrants? To answer this, estimate the expected stock price in 10 years when the warrants are expected to be exercised, then estimate the return to the holders of the bond-with- warrants packages. Use the corporate valuation model to estimate the expected stock price in 10 years. Assume that EduSoft’s current value of operations is $500 million and it is expected to grow at 8% per year.

c. 5. How would you expect the cost of the bond with warrants to compare with the cost of straight debt? With the cost of common stock (which is 13.4%)?

c. 6. If the corporate tax rate is 40%, what is the after-tax cost of the bond with warrants?

d. As an alternative to the bond with warrants, Mr. Duncan is considering convertible bonds. The firm’s investment bankers estimate that Edusoft could sell a 20-year, 8.5 percent annual coupon, callable convertible bond for its $1,000 par value, whereas a straight-debt issue would require a 10 percent coupon. The convertibles would be call protected for 5 years, the call price would be $1,100, and the company would probably call the bonds as soon as possible after their conversion value exceeds $1,200. Note, though, that the call must occur on an issue date anniversary. Edusoft’s current stock price is $20, its last dividend was $1.00, and the dividend is expected to grow at a constant 8 percent rate. The convertible could be converted into 40 shares of Edusoft stock at the owner’s option.

1. What conversion price is built into the bond?
d. 2. What is the convertible’s straight-debt value? What is the implied value of the convertibility feature?

d. 3. What is the formula for the bond’s expected conversion value in any year? What is its conversion value at year 0? At year 10?

d. 4. What is meant by the “floor value” of a convertible? What is the convertible’s expected floor value at year 0? At year 10?

d. 5. Assume that Edusoft intends to force conversion by calling the bond as soon as possible after its conversion value exceeds 20 percent above its par value, or 1.2($1,000) = $1,200. When is the issue expected to be called? (Hint: recall that the call must be made on an anniversary date of the issue.)

d. 6. What is the expected cost of capital for the convertible to Edusoft? Does this cost appear to be consistent with the riskiness of the issue?

d. 7. What is the after-tax cost of the convertible bond?

e. Mr. Duncan believes that the costs of both the bond with warrants and the convertible bond are close enough to one another to call them even, and also consistent with the risks involved. Thus, he will make his decision based on other factors. What are some of the factors which he should consider?

f. How do convertible bonds help reduce agency costs?

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Chapter

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PROJ 584 Managing SW Devel Projects All weeks Discussion Questions Project Plan Deliverable Final Exam Complete Answer

PROJ 584 Managing SW Devel Projects All weeks Discussion Questions Project Plan Deliverable Final Exam Complete Answer

PROJ 584 Managing SW Devel Projects All weeks Discussion Questions Project Plan Deliverable Final Exam Complete Answer

PROJ 584 Managing SW Devel Projects All weeks Discussion Questions Project Plan Deliverable Final Exam Complete Answer

PROJ 584 Managing SW Devel Projects All weeks Discussion Questions Project Plan Deliverable Final Exam Complete Answer

PROJ 584 Managing SW Devel Projects All weeks Discussion Questions Project Plan Deliverable Final Exam Complete Answer

PROJ 584 Managing SW Devel Projects All weeks Discussion Questions Project Plan Deliverable Final Exam Complete Answer

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PROJ 584 Managing SW Devel Projects All weeks Project DQS and Final Exam

PROJ 584 Managing SW Devel Projects All weeks Project

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PROJ 410 Contract and Procurement All Weeks Case_Study Mid Term and Final Term Complete Answer

PROJ 410 Contract and Procurement All Weeks Case_Study Mid Term and Final Term Complete Answer

PROJ 410 Contract and Procurement All Weeks Case_Study Mid Term and Final Term Complete Answer

PROJ 410 Contract and Procurement All Weeks Case_Study Mid Term and Final Term Complete Answer

PROJ 410 Contract and Procurement All Weeks Case_Study Mid Term and Final Term Complete Answer

PROJ 410 Contract and Procurement All Weeks Case_Study Mid Term and Final Term Complete Answer

PROJ 410 Contract and Procurement All Weeks Case_Study Mid Term and Final Term Complete Answer

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PROJ 410 Contract and Procurement Final Term Exam All Questions_answers All Correct Answer

PROJ 410 Contract and Procurement Final Term Exam All Questions_answers All Correct Answer

PROJ 410 Contract and Procurement Final Term Exam All Questions_answers All Correct Answer

PROJ 410 Contract and Procurement Final Term Exam All Questions_answers All Correct Answer

PROJ 410 Contract and Procurement Final Term Exam All Questions_answers All Correct Answer

PROJ 410 Contract and Procurement Final Term Exam All Questions_answers All Correct Answer

Set 1:

Week 8 : Wk8 – Final Exam

Page 1

1. (TCO 1 & 4) What would facilitate a business process outsourcing transition quickly and maintain some consistency in the organization? (Points : 5)
allow the outsourced firm autonomy to create its own policies and procedures with no regard for the project’s goals
quickly lay off all employees
retain key employees through transition
sidestep the RFP process because it takes too long

2. (TCO 4) Under this pricing contract, the buyer pays the seller’s actual costs and a fixed fee determined as a percentage of the estimated project costs. (Points : 5)
CPFF
CPF
CBF
CPIF

3. (TCO 7) Which step(s) should a buyer take to evaluate the seller’s proposal? (Points : 5)
Establish a scoring system
Weigh each evaluation criterion
Select key evaluation criteria
All of the above

4. (TCO 5) Negotiations in a BPO agreement are largely determined by which factor? (Points : 5)
The underlying objectives of each of the parties
The scope of services being outsourced
The relative bargaining positions of the parties
All of the above are factors that determine negotiations

5. (TCO 6) Employee morale and expectations, buyer’s precedent, service level desired by the buyer, and the efficient delivery of services by the seller are all _____. (Points : 5)
reasons affecting the human resource transfer decision
reasons to outsource human resources
reasons to maintain the business process in-house
reasons to exclude offshoring contractors from bidding on an RFP

6. (TCO 3) Which is not a key component in the project procurement management process? (Points : 5)
Select sellers
Plan contracting
Request for proposal
Plan purchases and acquisitions

7. (TCO 6) What are some steps to take when communicating with employees that outsourcing will take place in the company? (Points : 10)

8. (TCO 2 & 6) What typically gets outsourced and what would be the benefits to outsourcing the items listed? Please list and discuss six reasons. (Points : 10)

9. (TCO 9) What happens after a renegotiation? Why does this happen? (Points : 10)

10. (TCO 8 & 9) What is benchmarking? Give two examples with which you are familiar, and tell why benchmarking is useful in outsourcing. (Points : 10)

Page 2

1. (TCO 8) What is a performance standard and how is this agreed upon? Recommend the components that would need to be included and why. (Points : 30)

2. (TCO 5) What laws should an organization consult before, during, and after a BPO? Describe two of the laws and how you would include this in a presentation to executives. (Points : 30)

3. (TCO 5 & 7) List and describe five components of a BPO. Then summarize why each of the items that you chose are important to the BPO process. (Points : 30)

4. (TCO 2 & 5) Describe in detail how the negotiation process works when this process is done correctly. Then convince the executive team that the legal team has to be represented in the negotiation process. (Points : 30)

5. (TCO 8 & 10) What is early termination? Give an example and then discuss how can this be avoided or minimized. Persuade the legal team that the verbiage to accomplish this needs to be included in the BPO agreement. (Points : 30)

6. (TCO 5 & 6) What are some considerations when a company will be transferring employees to the outsourcer? Anticipate issues that will be brought up by the employees and the responses that the company will provide. (Points : 30)

Set 2:

1. (TCO 1) A cost-plus-percentage-fee contract is a: _______. (Points : 5)
cost-reimbursable contract, the seller pays the buyer’s actual costs, and a percentage of the total project costs
cost-reimbursable contract, the seller pays the buyer’s actual costs, and all of the total project costs
cost-reimbursable contract, the buyer pays the seller’s actual costs, and a percentage of the total project costs
cost-reimbursable contract, the seller pays the buyer’s actual costs, and none of the total project costs

2. (TCO 2) The difference between the project manager and contract administrator is: ______.

(Points : 5)
the project manager is responsible for the project-related coordination, while the contract manager is responsible for administering the contract
the contract administrator has the authority to make all contract-related decisions, like approving a change order. The project manager does not have this level of authority.
the project manager is responsible for the administering of the contract, while the contract manager is responsible for project-related coordination.
the project manager has the authority to make all contract-related decisions, like approving a change order. The contract administrator does not have this level of authority.

3. (TCO 3) Which is a key component in the project procurement management process? (Points : 5)
RFI Request for Issue
RFP Request for Proposal
RFB Request for Buy
RFC Request for Contract
4. (TCO 2) Senior management typically has different reasons for issuing the directive to outsource than management responsible for the business process. Senior management typically decides to evaluate outsourcing because: ______. (Points : 5)
there is a means to focus more resources on business process strategy
there is a means to focus less resources on business process strategy
there is an effort to decrease performance
there is an organization-wide directive to downsize or cut costs

5. (TCO ) When notifying third parties in a transition plan, who would not need to be notified? (Points : 5)
Third-party vendors
Government or regulatory authorities
Customer’s competitors
Customer’s clients
6. (TCO ) In International contracts, which industry-specific question does not need to be asked? (Points : 5)
Which country’s standards are used?
What regulatory authorities are called into question?
What regulations are specific to the business process operations?
What notice requirements or approvals are needed before and after a contract signing?

7. If a contract is seen through its full term, list two items that should be completed as part of contract close-out? What is a close out manager? Why is deliverable acceptance documents so important?

8. (TCO 8) What are the two ways to rank the seller’s proposals before selecting a seller? (Points : 12)

9. (TCO 6) Sometimes, a seller is selected based solely on lowest price. However, sometimes this is not always the most efficient or effective way of selecting a seller. What are some of the other evaluation criteria that a buyer may use to help select a seller? (Points : 12)

10. What are some of the common techniques used for establishing service levels?

Page 2.
1. (TCO ) What is benchmarking? Please support your answer. Defend the cost of benchmarking in an industry. (Points : 30)

2. (TCO ) What happens when there is a failure in an SLA? Use an example to analyze a failure in an SLA and how important SLAs are to the buyer in a BPO contract agreement. (Points : 30)

3. (TCO ) What are the elements of a Request for Proposal (RFP)? Please list and discuss five of the elements. (Points : 10)

4. (TCO ) Part 1: Discuss the following types of contract pricing: (a) fixed price, (b) cost-plus price, (c) time & materials, and (d) unit price. Part 2: Explain the appropriate utilization of each contract pricing type and the impact of risk to the contracting parties. Part 3: What type of contract pricing structure misaligns the buyer’s motivations with the seller’s? (Points : 30)

5. (TCO ) List and describe five components of a BPO. Then summarize why each of the items that you chose are important to the BPO process. (Points : 30)

6. What does the outsourcing of the HR function involve? What are pros and cons of HR Outsourcing? What do you think are three critical considerations that you must include in the implementation plan for this outsourcing transition?

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PROJ 420 Project Risk Management Discussion DQs Course Project All Weekly quiz A+ Complete Answer

PROJ 420 Project Risk Management Discussion DQs Course Project All Weekly quiz A+ Complete Answer

PROJ 420 Project Risk Management Discussion DQs Course Project All Weekly quiz A+ Complete Answer

PROJ 420 Project Risk Management Discussion DQs Course Project All Weekly quiz A+ Complete Answer

PROJ 420 Project Risk Management Discussion DQs Course Project All Weekly quiz A+ Complete Answer

All weeks DQS

Quizzes

Week 1: Selecting a Project
During Week 1, you will select a project for your risk management plan course project. The project can be one that you are working on as part of your regular job, a case study you have completed in the past, or a project that you want to plan, either business or personal. You will choose your own project so that you will be very familiar with the project and understand all of its various elements. The project request will be submitted as a graded assignment.
To select your project, submit a description of your project using the Week 1 Course Project Proposal & Outline Template (PROJ420_W1_ProposalAndOutline.docx) in Doc Sharing.
Submit your assignment to the Week 1 Course Project Dropbox located on the silver tab at the top of this page. For instructions on how to use the Dropbox, read these Step-by-Step Instructions or watch this Dropbox Tutorial. See Syllabus/”Due Dates for Assignments & Exams” for due date information.
You will receive a post in your Dropbox that will indicate approval to proceed.
This submission must be well presented because this is a required assignment that will receive a grade in Gradebook. The project paper is a required item for successful completion of this class. If you do not submit a project selection, you will not be able to proceed with assignments, as each week builds upon the last. We will discuss the various steps in developing the RMP for your project in our weekly threaded discussions. All submissions for a grade will also be evaluated for grammar and spelling.
Week 2: Project Sizing and Stakeholder Analysis
Your course project milestone for Week 2 will be to develop your Project Sizing and Stakeholder Analysis.
To do this, use the Week 2 Course Project Assignment Template (PROJ420_W2_AssignmentTemplate.docx) in Doc Sharing.
Week 3: Project Risk Breakdown Structure
For your third course project milestone, develop a Risk Breakdown Structure.
To do this, use the Week 3 Course Project Assignment Template (PROJ420_W3_AssignmentTemplate.docx) in Doc Sharing.
In order to keep the RBS manageable, identify ten risks from your project to be included in your RBS.
Week 4: Probability-Impact Matrix
This week for your course project milestone, submit a Probability-Impact Matrix for the project you selected based on the top ten risks you identified in your RBS in Week 3.
To do this, use the Week 4 Course Project Assignment Template (PROJ420_W4_PIMatrixTemplate.xlsx) in Doc Sharing.
Week 5: Risk Register
Develop and submit a Risk Register based on the ten risks you have assessed within the project you selected. Your Register should have four sections:
1. the project title
2. the risk description
3. the impact and probability rating
4. the planned response
Note that there is no template for this week’s assignment.
Week 6: Summary Risk Report
This week, you are to develop a Summary Risk Report based on the project you have selected and have been assessing.
Refer to Figure B-14 in Appendix B on page 221 in your Practical Project Risk Management: The ATOM Methodology text. The report is a summary, so please keep your assignment in that format. Five pages is the suggested maximum length.
Submit your assignment to the Week 6 Course Project Dropbox located on the silver tab at the top of this page. For instructions on how to use the Dropbox, read these Step-by-Step Instructions or watch this Dropbox Tutorial. See Syllabus/”Due Dates for Assignments & Exams” for due date information.
Week 7: Course Project Final Paper (The RMP)
Your final paper for the course project (the RMP) is due in Week 7.
Please reference the template found in Appendix A, page 197, of the Practical Project Risk Management: The ATOM Methodology text.

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MTH 220 College Algebra All weeks discussion Group Assignment Final Exam Complete Answer

MTH 220 College Algebra All weeks discussion Group Assignment Final Exam Complete Answer

MTH 220 College Algebra All weeks discussion Group Assignment Final Exam Complete Answer

MTH 220 College Algebra All weeks discussion Group Assignment Final Exam Complete Answer

MTH 220 College Algebra All weeks discussion Group Assignment Final Exam Complete Answer


MTH 220 College Algebra All weeks discussion Group Assignment Final Exam Complete Answer

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The Manning Company has financial statements_The firm is expecting a 20 percent increase in sales_Answer

The Manning Company has financial statements_The firm is expecting a 20 percent increase in sales_Answer

The Manning Company has financial statements_The firm is expecting a 20 percent increase in sales_Answer

The Manning Company has financial statements_The firm is expecting a 20 percent increase in sales_Answer

The Manning Company has financial statements_The firm is expecting a 20 percent increase in sales_Answer

The Manning Company has financial statements_The firm is expecting a 20 percent increase in sales_Answer

The Manning Company has financial statements_The firm is expecting a 20 percent increase in sales_Answer

The Manning Company has financial statements as shown below, which are representative of the company’s historical average.
The firm is expecting a 20 percent increase in sales next year, and management is concerned about the company’s need for external funds. The increase in sales is expected to be carried out without any expansion of fixed assets, but rather through more efficient asset utilization in the existing store. Among liabilities, only current liabilities vary directly with sales.
Using the percent-of-sales method, determine whether the company has external financing needs, or a surplus of funds. (Hint: A profit margin and payout ratio must be found from the income statement.)
Income Statement
Sales $200,000
Expenses 158,000
Earnings before interest and taxes $ 42,000
Interest 7,000
Earnings before taxes $ 35,000
Taxes 15,000
Earnings after taxes $ 20,000
Dividends $ 6,000

Balance Sheet
Assets Liabilities and Stockholders’ Equity
Cash $ 5,000 Accounts payable $ 25,000
Accounts receivable 40,000 Accrued wages 1,000
Inventory 75,000 Accrued taxes 2,000
Current assets $120,000 Current liabilities $ 28,000
Fixed assets 80,000 Notes payable 7,000
Long-term debt 15,000
Common stock 120,000
Retained earnings 30,000
Total assets $200,000 Total liabilities and
stockholders’ equity $200,000

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The Manning Company has financial statements_The firm is expecting a 20 percent increase in sales_Answer

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Elliot Escargots sells commercial and home snail extraction tools and serving pieces Correct Answer

Elliot Escargots sells commercial and home snail extraction tools and serving pieces_A+_Answer

Elliot Escargots sells commercial and home snail extraction tools and serving pieces_A+_Answer

Elliot Escargots sells commercial and home snail extraction tools and serving pieces_A+_Answer

Elliot Escargots sells commercial and home snail extraction tools and serving pieces_A+_Answer

Elliot Escargots sells commercial and home snail extraction tools and serving pieces_A+_Answer

1.
(TCO 7) Elliot’s Escargots sells commercial and home snail extraction tools and serving pieces. Currently, the snail extraction line of products takes up approximately 50 percent of the company’s retail floor space. The CEO of Elliot’s wants to decide if the company should continue offering snail extraction tools or focus only on serving pieces. If the snail extraction tools are dropped, salaries and other direct fixed costs can be avoided and serving piece sales would increase by 13 percent. Allocated fixed costs are assigned based on relative sales.

Snail Extraction Serving
Tools Pieces Total
Sales $1,200,000 $800,000 $2,000,000
Less cost of goods sold 700,000 500,000 1,200,000
Contribution margin 500,000 300,000 800,000
Less direct fixed costs:
Salaries 175,000 175,000 350,000
Other 60,000 60,000 120,000
Less allocated fixed costs:
Rent 14,118 9,882 24,000
Insurance 3,529 2,471 6,000
Cleaning 4,117 2,883 7,000
Executive salary 76,470 53,530 130,000
Other 7,058 4,942 12,000
Total costs 340,292 308,708 649,000
Net income $159,708 ($ 8,708) $151,000

Prepare an incremental analysis in good form to determine the incremental effect on profit of discontinuing the snail extraction tool line.

(Points : 6)

2. (TCO 4)
Paschal’s Parasailing Enterprises has estimated that fixed costs per month are $115,600 and variable cost per dollar of sales is $0.38 (6 points).

What is the break-even point per month in sales?
What level of sales is needed for a monthly profit of $67,000?
For the month of August, Paschal’s anticipates sales of $585,000. What is the expected level of profit? (Points : 6)

3. (TCO 6) Princess Cruise Lines has the following service departments; concierge, valet, and maintenance. Expense for these departments are allocated to Mediterranean and Trans
Atlantic cruises. Expenses for the departments are totaled (both variable and
components are combined) and as follows:

Concierge $1,500,000
Valet $2,750,000
Maintenance $2,250,000

The sea miles logged are 5,000,000 for the Mediterranean and 20,000,000 for the Trans-Atlantic voyages.

Based upon the sea miles logged, allocate the service department costs (6 points). (Points : 6)

4.
(TCO 9) Thurman Munster, the owner of Adams Family RVs, is considering the addition of a service center his lot. The building and equipment are estimated to cost $1,100,000 and both the building and equipment will be depreciated over 10 years using the straight-line method. The building and equipment have zero estimated residual value at the end of 10 years. Munster’s required rate of return for this project is 12 percent. Net income related to each year of the investment is as follows:

Revenue $450,000
Less:
Material Cost $60,000
Labor 100,000
Depreciation 110,000
Other 10,000 280,000
Income before taxes 170,000
Taxes at 40% 68,000
Net Income $102,000

(A) Determine the net present value of the investment in the service center. Should Munster invest in the service center?

(B) Calculate the internal rate of return of the investment to the nearest ½ percent.

(C) Calculate the payback period of the investment.

(D) Calculate the accounting rate of return.

(Points : 8)

5.
(TCO 5) The following information relates to Vice Versa Ventures for calendar year 20XX, the company’s first year of operations:

Units produced 20,000
Units sold 15,000
Selling price per unit $30
Direct material per unit $5
Direct labor per unit $5
Variable manufacturing overhead per unit $2
Variable selling cost per unit $3
Annual fixed manufacturing overhead $160,000
Annual fixed selling and administrative expense $80,000

a. Prepare an income statement using full costing.

b. Prepare an income statement using variable costing.

(Points : 8)

6.
(TCO 8) Leekee Shipyards has a new barnacle removing product for ocean going vessels. The company invests $1,000,000 in operating assets and plans to produce and sell 200,000 units per year. Leekee wants to make a return on investment of 20% each year. Leekee needs to know what price to charge for this product.

Use the absorption costing approach to determine the markup necessary to make the desired return on investment based on the following information:

Per Unit Total
Direct Materials $2.00
Direct Labor $1.50
Variable Manufacturing Overhead
$1.00
Fixed Manufacturing Overhead $100,000
Variable Selling and Administrative Expense $0.10
Fixed Selling and Administrative Expense $100,000

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Howle Manufacturing Company began operations on January 1_Answer

Howle Manufacturing Company began operations on January 1_Answer

Howle Manufacturing Company began operations on January 1_Answer

Howle Manufacturing Company began operations on January 1_Answer

Howle Manufacturing Company began operations on January 1_Answer

Howle Manufacturing Company began operations on January 1_Answer


Howle Manufacturing Company began operations on January 1. During the year, it started and completed 3,200 units of product. The company incurred the following costs.

1. Raw materials purchased and used—$4,600.
2. Wages of production workers—$7,680.
3. Salaries of administrative and sales personnel—$3,330.
4. Depreciation on manufacturing equipment—$10,300.
5. Depreciation on administrative equipment—$3,990.

Howle sold 1,920 units of product.

1)What is the cost of ending inventory?
2) What is the cost of goods sold?
(Round answers to two decimal places if necessary)

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Howle Manufacturing Company began operations on January 1_Answer